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Pernod unable to meet global NZ Sauvignon demand

Drinks giant Pernod Ricard, owner of Brancott Estate, has said it will be unable to meet the global demand for Marlborough Sauvignon Blanc this year after one of its smallest harvests in 10 years.

Extreme spring frosts significantly impacted yields following an earlier than normal budburst. Bunch sizes were also down, impacting juice extraction levels.

Pernod Ricard has 34% less Marlborough Sauvignon Blanc to go round this year compared to the 2020 vintage, which was already lower than long term averages.

The lower volumes are leading to increased costs, which is being compounded by increased input costs and ongoing labour shortages due to the closure of borders in New Zealand.

Shipping costs are also at their highest level since the global financial crisis, which has added an additional layer of expense to operations.

“The reality is that we are not going to meet the demand of Marlborough Sauvignon Blanc this year. Being an agricultural industry, the weather can be unpredictable, and periodically we experience extreme weather events.

“This year’s small Marlborough Sauvignon vintage is going to result in significant supply challenges for the short term, but with the popularity of Marlborough Sauvignon Blanc continuing to rise, we are confident we will bounce back. Our primary focus now is to maximise the supply we have got and hold our listings on shelf,” said Bryan Fry, chief executive of Pernod Ricard Winemakers.

“It’s important to note that while this season’s crop size has been impacted, the grape quality is exceptional and offers intense regional characteristics, and we are expecting to produce some of the finest Marlborough Sauvignon Blanc wines in the last decade.

“Our priority is to continue to make exceptional wines in a safe and sustainable way and fulfil demand to the best of our ability,” Fry added.

Pernod’s wine price differs from retailer to retailer and the business will be reviewing the prices for vintage 2021, as well as reducing promotional activity.

Sauvignon Blanc accounts for 86% of export volume from New Zealand, with the UK (29%), US (27%) and Australia (23%) being the largest export markets.

With its Brancott Estate and Stoneleigh brands, Pernod Ricard is the second largest supplier of New Zealand Sauvignon Blanc in the UK, where it holds a 14% value and volume share of the Kiwi Sauvignon market.

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